Digging deeper on how PicPay works in Brazil

Brazil has grown from a little-known local market to a true commercial giant in just a few years since start of the pandemic and has experienced real boom in gaming and fintech companies. It was impossible to miss such rapid growth, and today we will discuss how it was achieved. More precisely, which payment methods contributed to development of payment industry in the country, and we will especially focus on popular wallet PicPay.

Brazilian wallet PicPay is particularly popular in gaming industry. Gaming providers are among first who have appreciated convenience and speed of payments using PicPay. In this review, we will look at the main advantages of using this payment method and briefly touch on competitors too.

How PicPay works

PicPay is essentially an electronic wallet that allows you to pay for purchases from the wallet's balance itself or from credit card linked to it as funds source. The process is operated from mobile phone using an app available on Android and iOS. There is also a built-in QR code scanning feature and, accordingly, ability to make payments using this technology, which is currently leading in alternative payment methods worldwide.

Brazilian audience is one of the most financially active on the continent, as evidenced by rapid growth of PIX payment method, which, by the way, is also based on QR codes. PicPay is the second most popular and is mainly used for online payments, including funding gaming website balances.

The main reasons to integrate PicPay into your website are:

• The wallet's focus on mobile devices. This allows meeting requirements of modern clients who rarely use computers or even laptops for most purchases or games. Mobile phone is always with us, and focusing on this allows building meaningful relationships with clients, wherever they are: at home, on a picnic with friends, or even on the way to office.
• Security and speed of payments. Since PicPay offers instant transfer credit and keeps clients' personal data secure, this gives merchants a serious advantage. Speed is important in online payments, and this wallet handles it well. Wallet is also intuitively understandable, which does not cause additional difficulties for all categories of clients.
• Wide coverage in the country. An important factor is recognition of payment solution; if it is already known to most users, it will be easier for business to gain trust. This is why direct acquiring of Visa and Mastercard is often listed as a product advantage; it means that acquirer has already verified merchant and they can be trusted (this is the case with direct acquiring). Clients tend to trust more authoritative sources, and Visa and Mastercard are such in the world of payments. The same applies in Brazil, where almost everyone knows about PicPay wallet.
• Low fees compared to payment cards or transfers are also a plus for merchants in accepting wallet payments. Along with customer service and high payment approval ratio, it is always important to assess business expenses and the cost of payment processing. Optimizing this cost is often a challenging task, so choosing a payment method that is both popular and inexpensive for the business is literally the perfect result, which is not always achievable.

Thanks to these undeniable advantages, PicPay wallet has earned its deserved place among popular payment methods in Brazil and is often used for various online payments. By using PIX technology, PicPay ensured its 24/7 operability, which also played a significant role in integrating this wallet into gaming industry.

PicPay analogs in the Brazilian market

When considering PicPay, we would like to also talk about few other frequently used payment methods in Brazil, as its active fintech development has become an example for many other countries.

One of the most popular financial apps in Brazil and Latin America as a whole is Nu Bank. This is a full-fledged neobank that offers a range of services for transfers, card issuance, payments, and also provides insurance service and loans. Nu Bank has gained user base with its simple design and intuitive interface, which leave pleasant impressions from daily use, and together with necessary financial services, create an indispensable app. Various user experience studies have repeatedly proven that users prefer to get few services in one place, and this feature was emphasized in Nu Bank. One registration and all financial services are available immediately.

Great alternative is offered by another giant of Latin American fintech — Mercado Pago. This app has one of the largest customer bases in the region and operates in Argentina, Chile, Brazil, Venezuela, Colombia, and Mexico. Neobank offers prepaid and credit cards, wallet services, transfers, and targeted payments. The main advantage is opening an account in a licensed institution online without the need to visit physical branches. Nu Bank and Mercado Pago function exactly like Revolut, which is more known in European countries. This approach can no longer be called unique, as there are plenty of similar apps, but the audience still needs financial services at a distance and access to their funds at any time of the day, so it is very relevant. Although most traditional banks have already adapted to modern trends and offer online banking and apps, not all have reached the same level of quality as these products.

In Brazil, response to the growing need for online payments was PIX payment method, which covered urgent need to move away from cash and go digital. PIX is the basis of Brazil's payment infrastructure and it serves as the main technology for many government services and fintech products.

In gaming industry, PIX has become a key payment method and helped most operators increase the number of players in the country. Uninterrupted and round-the-clock acceptance of deposits using this payment method has proven to be much better than card acquiring. For several reasons related to technical and infrastructural vectors. Payment approval ratio into success using this payment method literally reaches 100%, which we can’t say about credit card acquiring, where there is a higher risk of errors and transaction declines.

Overall trends in modern fintech indicate similar directions — slight move from credit cards to more secure and faster payment methods. Credit cards are convenient and familiar, but with the development of new payment technologies, they may not be the best in terms of security, and risk of fraud and chargebacks forces merchants to consider alternatives. What to wait further — we will observe very soon and will keep you informed on the pages of MonoTalks in dedicated "News" section.